It’s an obvious solution to tech’s diversity problem: invest venture capital into businesses founded by women and people of color. They’re not only likely to hire a more diverse pool of employees, but they may also start businesses that have been left out of the market.
Diishan Imira is the co-founder and CEO of Mayvenn, an e-commerce platform that allows hairstylists to sell hair extensions directly to their clients.
“I grew up, our family had hairstylists in it, so I kind of understand that world,” said Imira. “What was very striking, and especially in the African-American community, is that we purchase $9 billion of hair products. But we don’t sell any of those products.”
Traditionally, customers buy hair extensions online or at a beauty supply store and then bring them to their stylist to have them sewn in. Imira realized that stylists sell shampoo and hairspray, but are missing out on the hair extension market. But there was a hurdle: Extensions are expensive. Salon owners couldn’t afford to stock an inventory upfront.
|Rihanna is filling a hole in the $430 billion beauty market|
|Amazon is trimming some profit off high-end salons|
Mayvenn sets salons up with an online store that lets them sell extensions. The stylist refers the client to Mayvenn’s stock, the extensions are shipped from Mayvenn directly to the salon and then that stylist gets a commission on the sale.
Getting a slice of the venture capital pie was not easy though. Mayvenn started with just under $50,000, and most of that was money invested by friends. Then Imira got into the 500 Startups program, an accelerator for entrepreneurs. He was able to raise another $800,000 from small funds.
“It was a lot of trying to get people to understand this demographic that, quite frankly, Silicon Valley is not investing in,” he said. “So that was another part that was really kind of an uphill battle.”
His strongest pitch? Hair extensions and wigs are a $5 billion market in the U.S. And outside of the African-American community, more people are wearing them as a fashion accessory.
Shameka Montgomery, who owns The Luv of Hair, a salon in Emeryville, California, said most of her business comes from sewing in extensions. She charges $400 minimum for the service, which involves hand stitching. Being able to sell the product directly has boosted business.
“I had one client sitting in a chair getting a sew-in and she saw a curly unit that I had just finished making. And she purchased it,” she said.
The cost of the product alone? $1,100.